Does business strategy affect IT strategy?

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How would you answer the question, "Does your business rely on technology?"

Most businesses in 2023 would answer, "Yes!" We use email, websites, and texting to communicate with clients. We use applications to complete tasks and store data. Technology is a significant part of our daily operations and lives.

With this in mind, should IT strategy be a part of your business strategy? Do the two affect each other, and if so, in what ways?

WEBIT Services has over 25 years of experience helping clients develop IT strategies and create budgets and growth plans.

By reading this article, you will learn four ways business strategy affects IT strategy and how they work together to help you accomplish your business goals.

4 ways business strategy affects IT strategy

1. Business goals determine where your business is going (including IT)

Business goals will help determine your company's direction in the coming year. These goals and anticipated growth can affect your IT goals, as well.

These goals will act as the rudder on your business "ship." What direction are you going? How quickly? How many people will you need to get there? Do you know what tools you'll need to get there?

Unfortunately, if a company doesn't have a plan, there's no way to strategize or anticipate what the business will need to reach that goal.

However, if the company has a plan and doesn't share it with its IT provider or internal IT team, IT cannot help build an accurate, effective IT plan. That may include new equipment, equipment upgrades, and IT tools to assist the business in meeting its goals.

For example, if you plan to double in size in three years, this will affect how much IT equipment you will need to invest in for that anticipated growth.

Servers, for instance, are built to accommodate specific amounts of data. If your business doubles, it will need a much bigger server or multiple servers to accommodate the additional data.

If the IT provider or team does not know the business plans to double, it cannot make accurate recommendations. Without that knowledge, it may recommend new servers that cannot accommodate the influx of users and data.

2. Business strategy determines the IT budget

Creating a business strategy also includes planning future spending for all areas of the business, including IT. The budget also determines what kinds of tools and technology you can afford.

For instance, suppose a business talks to its vCIO about implementing a new CRM tool. This can go one of two directions:

  1. If the business has a budget, they share it, and the vCIO only researches tools within that price range. However, if the price range is unrealistic, the vCIO can help adjust expectations to find a tool that both meets needs and wallets.
  2. The business does not share its budget (or does not have one), and the vCIO spends days or weeks researching tools only to be rebuffed because the tools cost more than the business wants to invest.

Sharing budgets with your IT provider or internal IT team can help create realistic expectations for the kind of technology you can purchase and when it can be purchased.

By knowing your budget, your vCIO can also help create a complete strategic picture: how much this technology costs, how it will help you accomplish your goals, and what the investment looks like over time.

3. Technology influences your business

If your business relies on technology to complete daily tasks and reach goals, it should be part of your overall business strategy. Likewise, if your business depends on a tool for its success, that tool should be considered as you develop company plans and strategies.

Luckily, businesses don't have to create an IT strategy on their own. Instead, a vCIO will act as your IT strategist, helping you choose the most effective technology and IT investments to reach your goals.

However, open, honest communication is vital in building an IT strategy.

The vCIO must be honest, ask intelligent questions to understand their clients and be willing to educate clients. Conversely, the client must share relevant information with the vCIO to have an accurate picture of goals, expectations, and budgeting.

Without open communication, accurate, holistic strategies cannot be created.

4. IT should grow with your business

The more your business grows, the more technology you will likely need. You may need more automated processes to help manage increased productivity. You may need more devices for a growing workforce.

If your business is growing and changing, your technology should grow and change alongside it. Technology cannot be stagnant while a company evolves.

For example, someone starting a business ten years ago would use the popular operating system for the time. Ten years later, they shouldn't still use the same operating system. The old system cannot keep up with modern applications or even be compatible with modern hardware and software.

That company should update its technology to meet its new goals, size, and IT needs.

Next steps for bringing IT strategy into your business strategy

IT strategy is born from communication and collaboration between clients and their IT providers. It seeks to answer significant questions like, "Where is my business going, and how can technology help get me there?"

Business strategy can affect IT strategy in four ways:

  1. Business goals determine where your business is going (including IT)
  2. Business strategy determines the IT budget
  3. Technology influences your business
  4. IT should grow with your business

Quality IT strategy also helps businesses budget for IT investments, improve productivity, and help with cybersecurity.

However, if the client or provider is unwilling to communicate openly, the IT strategy will fall short and create the stress it is meant to alleviate.

For over 25 years, WEBIT Services has helped hundreds of clients develop and execute IT strategies to help their businesses.

To examine or build your IT strategy, talk to your provider. Ask them what strategies are in place, and, if possible, review your IT roadmap. See if its goals align with your business trajectory.

If it does not, it might be time to look for a new IT provider.

Schedule a free 30-minute consultation to see if WEBIT Services can help.

If you're not yet ready for your free 30-minute consultation, you may be interested in these articles on the elements of an IT strategy: